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<\/p>\nBryan Taylor, Chief Economist, Finaeon<\/p>\n
Adidas ended its relationship with Ye, formerly known as Kanye West, as a result of antisemitic comments that he made.\u00a0\u00a0Adidas both removed its Yeezy Gap product from its stores and shut down the YeezyGap.com website. It is estimated that the separation from Ye will cost Adidas around $250 million in revenues. Adidas had already said that it was reassessing its relationship with Kanye West as a result of him wearing a \u201cWhite Lives Matter\u201d shirt during Paris Fashion Week. Ye was also locked out of his Twitter account.<\/p>\n
The result?\u00a0\u00a0Nike stock moved up, rising 3.71 points from 88.01 to 91.72 on October 25. Nike stock has done poorly this year, falling from 166.67 on December 31, 2021 to 91.72 on October 25.<\/p>\n
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Figure 1.\u00a0\u00a0Nike Stock Price 2012 to 2022<\/b><\/span><\/p>\n Is it common for individual celebrities to influence the performance of a stock?\u00a0\u00a0Although it happens rarely, it does happen.<\/p>\n On June 14, 2021, in a press conference, Cristiano Ronaldo, who was in a Coca-Cola advertisement in the nineties, pushed away two Coca-Cola bottles and drank water instead.\u00a0\u00a0His gesture had a huge impact on the company and the next day, shares of Coca-Cola fell from $55.60 to $52.22 costing the company $4 billion in capitalization.<\/p>\n Remember Donald Trump?\u00a0\u00a0In December 2016 he tweeted that Boeing\u2019s costs for a new Air Force One commission were \u201cout of control,\u201d and that he was going to cancel the order.\u00a0\u00a0The result? Boeing stock fell by $2 reducing the company\u2019s market capitalization by $1 billion.<\/p>\n Another example comes from Elon Musk.\u00a0\u00a0In May 2020, Elon Musk tweeted that the value of Tesla stock was too high.\u00a0\u00a0His tweet cost the company $14 billion in capitalization and cost Elon Musk personally $3 billion.\u00a0\u00a0Musk\u2019s reversals of his behavior can cost Tesla and its investors money.\u00a0\u00a0In February 2021, Musk announced that Tesla had bought $1.5 billion in Bitcoin to enable the company to facilitate payments in Bitcoin.\u00a0\u00a0But in May 2021, Musk announced that Tesla would no longer accept Bitcoin and the value of the company\u2019s stock fell by 10%.\u00a0\u00a0Then in June 2021, Musk announced that Tesla would accept payments in Bitcoin.\u00a0\u00a0Elon, make up your mind!<\/p>\n Figure 2. Tesla Stock Price 2017 to 2022<\/b><\/span><\/p>\n So can celebrities influence the performance of companies.\u00a0 Yes, they can, but the impact only occurs in the short run.\u00a0 Over time, it is the company\u2019s profits and cash flow that determine the value of the company.\u00a0 Celebrities cannot control the long-run performance of a stock.\u00a0 So next time a celebrity causes the price of a stock to decline, you may want to see it as a buying opportunity.<\/p>\n","protected":false},"excerpt":{"rendered":" Bryan Taylor, Chief Economist, Finaeon Adidas ended its relationship with Ye, formerly known as Kanye West, as a result of antisemitic comments that he…<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1,165],"tags":[],"class_list":["post-3411","post","type-post","status-publish","format-standard","hentry","category-insights","category-november-2022"],"acf":[],"_links":{"self":[{"href":"https:\/\/maxrezmedia.com\/website_131ddb8a\/wp-json\/wp\/v2\/posts\/3411","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/maxrezmedia.com\/website_131ddb8a\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/maxrezmedia.com\/website_131ddb8a\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/maxrezmedia.com\/website_131ddb8a\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/maxrezmedia.com\/website_131ddb8a\/wp-json\/wp\/v2\/comments?post=3411"}],"version-history":[{"count":5,"href":"https:\/\/maxrezmedia.com\/website_131ddb8a\/wp-json\/wp\/v2\/posts\/3411\/revisions"}],"predecessor-version":[{"id":3416,"href":"https:\/\/maxrezmedia.com\/website_131ddb8a\/wp-json\/wp\/v2\/posts\/3411\/revisions\/3416"}],"wp:attachment":[{"href":"https:\/\/maxrezmedia.com\/website_131ddb8a\/wp-json\/wp\/v2\/media?parent=3411"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/maxrezmedia.com\/website_131ddb8a\/wp-json\/wp\/v2\/categories?post=3411"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/maxrezmedia.com\/website_131ddb8a\/wp-json\/wp\/v2\/tags?post=3411"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/maxrezmedia.com\/website_131ddb8a\/wp-content\/uploads\/2024\/08\/download-44.png\")
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